Causes and Consequences of Merger Waves
AbstractThis paper presents some ideas about determinants of merger waves and some evidence on their effect on profitability and employment. A brief survey of previous merger waves and an analysis of the recent one give support to the hypothesis that sectoral shocks are at the root of merger waves. Deregulation and globalization are identified as the shocks responsible for the latest wave. The impact of merger activities on profitability and employment growth are studied by using the DOME database which has been built up at the Kiel Institute of World Economics. On average, performance of merging and non-merging firms do not differ significantly. In smaller, more homogenous sub-samples, however, substantial sectoral differences are found. The most important determinant of the success of mergers is the size of the target unit.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1092.
Length: 28 pages
Date of creation: Jan 2002
Date of revision:
Mergers; Deregulation; Globalization; Event Studies;
Find related papers by JEL classification:
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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